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Semiannual Report to the Congress October 1, 1996 - March 31, 1997
APPENDIX ..................................................................................................................... 75
Reporting Requirements ................................................................................................. 76
Explanation of Audit Schedules ....................................................................................... 77
Audit Schedules .............................................................................................................. 78
Questioned Costs ................................................................................................ 78
Disallowed Costs ................................................................................................ 78
Recommendations That Funds Be Put To Better Use .......................................... 79
Unresolved Audits Over 6 Months ........................................................................ 80
Final Audit Reports Issued by the OIG .................................................................. 83
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Semiannual Report to the Congress October 1, 1996 - March 31, 1997
This semiannual report of the Office of Inspector General (OIG) details some of our most significant
activities for the period of October 1, 1996 - March 31, 1997. During this period, my office focused
its audit and investigative activities on ensuring the effectiveness and integrity of the following
functions of the Department: employment and training, workplace standards and safety and health;
workplace benefits; and departmental management. In addition, we continued to carry out our
mission of reducing labor racketeering in the workplace.
The OIG has also put great effort in helping to ensure the Department’s implementation of the
Government Performance and Results Act (GPRA) of 1993, which becomes effective this October.
GPRA represents a new era of accountability for Government programs and services. The
fundamental purpose of the law is to increase the performance of Government programs and
services by identifying their impact and cost, and then measuring their return on the taxpayers’
investment. There is no question that meeting the intent of GPRA is a challenge to all of us in
Government.
However, performance accountability and results is something that we in the IG community, and
certainly this OIG, have promoted for a number of years. Over the years, OIG audits and
investigations have identified areas where performance could be improved and cost efficiencies
achieved. With our experience and expertise with DOL programs, we believe we can be helpful in
achieving the spirit and intent of GPRA at the Department of Labor.
To this end, we have completed drafting a strategic plan which outlines some very ambitious goals
for the next few years. Among these goals will be our intent to ensure that our audit and investigative
activities help the Department’s programs and services reach and maintain an optimum level of
performance, address key issues of concern to the Congress, and ensure that taxpayer interests are
served. In addition, we intend to expand our traditional audit and investigative functions to increase
our focus on improving program performance by providing consultation, technical assistance, and
special reviews to the program agencies within the Department. Resources permitting, we also
intend to maintain, if not increase, our level of effort in combating labor racketeering in the workplace.
This includes utilizing “industry probes,” civil RICO cases, and other innovative strategies to detect
and investigate a new generation of racketeers.
I look forward to continuing to work with the Secretary, Management, DOL staff at all levels, as well
as Congress, in our common goal of ensuring the effectiveness, efficiency, and integrity of the
programs that serve -- and protect the employment rights -- of American workers.
Charles C. Masten
Inspector General
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Semiannual Report to the Congress October 1, 1996 - March 31, 1997
SIGNIFICANT CONCERNS
Ensuring the The Davis-Bacon Act requires that each contractor and
Accuracy and subcontractor involved in Federal construction projects pay its
Reliability of employees no less than “locally prevailing” wages and fringe
Prevailing Wage Data benefits. The Congressional Budget Office estimates that $42
billion was spent in Federal construction during Fiscal Year 1996.
Therefore, the economic effect of this program is substantial.
Based on our recent audit, the OIG is concerned that much of the
data utilized in determining the prevailing wage and fringe benefit
rates for particular geographic areas are inaccurate. As a result,
we have made recommendations to the Department on ways to
ensure the accuracy and reliability of this data. We strongly
encourage the Department to take swift action on this most
important issue.
Ensuring the The OIG is concerned with ensuring the effective implementation
Effective of GPRA at DOL, both from a Department-wide and an OIG
Implementation of perspective.
GPRA at DOL
The Department needs to ensure that it has an effective
performance measurement and accounting system in place to be
Improved able to meet the intent of GPRA. The Department has made an
Performance
initial good-faith effort to meet the requirements of the law,
Measurement and
Financial Systems including educating its various components on the requirements
Needed to Meet of the law and coordinating the development of agency-specific
GPRA Requirements strategic plans. However, it needs to ensure that its program
agencies develop outcomes-based performance measures,
particularly in the employment and training area. The Department
also needs to transition from financial accounting to cost
accounting and to improve its agency-level accounting systems.
These performance and financial systems will be needed to
assess the results and costs of DOL programs, which will be
crucial in determining return on investment, making decisions on
allocation of resources, and reporting to Congress.
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Semiannual Report to the Congress October 1, 1996 - March 31, 1997
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Semiannual Report to the Congress October 1, 1996 - March 31, 1997
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Semiannual Report to the Congress October 1, 1996 - March 31, 1997
Ensuring Pension Assets converting funds for their own use. That type of activity needs to
are Safeguarded While be addressed through an aggressive criminal enforcement
Held in Trust program. Therefore, enforcement and oversight of this area
needs to remain a priority of the Department.
Legislation Needed to The OIG also has long-standing concerns with respect to ensuring
Improve Audits of that funds are safeguarded while they are held in trust by plan
Pension Plans and administrators, service providers, or trustees. Chief among our
Reporting of Violations recommendations in this area is the need to repeal ERISA’s
limited scope audit provision, which results in inadequate
auditing of pension plan assets. This provision exempts from
audit all pension plan funds that have been invested in institutions
such as savings and loans, banks or insurance companies
already regulated by Federal or State Governments. At the time
ERISA was passed two decades ago, it was assumed that all of
the funds invested in those regulated industries were being
adequately reviewed. Unfortunately, as we have found from the
savings and loan crisis, that is not always the case. Currently,
because of this provision, independent public accountants (IPAs)
conducting audits of pension plans cannot render an opinion on
the plan’s financial statements in accordance with professional
auditing standards.
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Semiannual Report to the Congress October 1, 1996 - March 31, 1997
The Office of Audit has begun to reevaluate and modify the way
OFFICE OF
audit products are developed and programs evaluated in efforts
AUDIT to help the Department meet the performance requirements of the
Government Performance and Results Act (GPRA). The main
thrust of our audit program is to assist DOL management in
reexamining programs and processes with a view toward
improving the way work is done and, therefore, ensure
accountability for achieving results. The OIG also seeks to
determine whether reasonable value is obtained for the taxpayer
dollars spent on departmental activities and functions and
attempts to identify and share successful and cost/beneficial
ideas and methods throughout the Department. In addition, we
are taking a more active role in providing consultation and
technical assistance to the Department.
The following are some of our most significant audit activities this
period.
Accuracy of Data This audit disclosed that inaccurate data were frequently used in
Used in Prevailing Davis-Bacon wage determinations and that 84 percent of the
Wage Determinations inaccuracies resulted from data reported by employers and third
parties. We also identified flaws in the methodology used in the
prevailing wage surveys. Because of the substantial economic
impact of this program, we concluded that the survey process
needs to be reformed. Our recommendations include drawing
statistical samples of employers, conducting onsite pay-roll
reviews to obtain wage data, and working with BLS to address
deficiencies in the survey methodology ............................ pg. 14
Wage and Hour’s This audit found that there is a need for the Wage and Hour
Back Wage Collection Division (WHD) to improve its management over collected back
Activities wages. We found that WHD was effective in con-ducting
compliance investigations, establishing findings, and assuring
that employees received the back wages they were due.
However, WHD’s internal controls over cash that was collected
from employers for distribution to affected workers are
inadequate. We identified approximately $8.5 million in back
wages that should be transferred to Treasury ................... pg. 16
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Semiannual Report to the Congress October 1, 1996 - March 31, 1997
OSHA’s The audit found that workers who complained directly to their
Whistleblower Protection employers about workplace safety or health hazards were more
Program likely to be fired from their jobs than workers who directly
complained to OSHA. The OIG also found that OSHA’s current
operating practices may prevent whistleblowers from obtaining
“all appropriate relief,” as provided by the OSH Act for
complainants with merit cases. As a result of our findings, we
made several recommendations to improve the protection
provided to whistleblowers .............................................. pg. 18
The Department’s This audit found that PWBA’s efforts in this project had a positive
Employee Contribution impact in protecting plan assets, particularly with respect to
Project increasing enforcement in this area, as well as participant
awareness of the problem. However, we also found that
improvements were needed in the targeting of this enforcement
initiative as well as in the accuracy and completeness of its case
management system data. Among our recommendations was
for PWBA to assess the effectiveness of the Regional Offices’
approaches to enforcement in this project ..................... pg. 51
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Semiannual Report to the Congress October 1, 1996 - March 31, 1997
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Semiannual Report to the Congress October 1, 1996 - March 31, 1997
SELECTED STATISTICS
Office of Audit
Office of Investigations
NOTE: The Office of Investigations conducts criminal investigations of individuals which can lead to prosecutions ("convictions") by criminal
complaints, warrants, informations, indictments, or pre-trial diversion agreements. Successful prosecutions may carry sentences such as
fines, restitutions, forfeitures, or other monetary penalties. The Office of Investigations' monetary results also include administrative and civil
actions which are further detailed and defined can be found on page 89 of this report.
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Semiannual Report to the Congress October 1, 1996 - March 31, 1997
WORKPLACE STANDARDS
AND SAFETY AND HEALTH
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Semiannual Report to the Congress October 1, 1996 - March 31, 1997
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Semiannual Report to the Congress October 1, 1996 - March 31, 1997
BACK-WAGE COLLECTIONS
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Semiannual Report to the Congress October 1, 1996 - March 31, 1997
We sampled 672 FYs 1995 and 1996 active case files, 534 of
which resulted in determinations that funds were due
employees. Generally, WHD was effective in conducting the
compliance investigations, establishing findings and assuring
that employees received the back wages they were due.
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Semiannual Report to the Congress October 1, 1996 - March 31, 1997
WHISTLEBLOWER PROTECTIONS
Whistleblower Section 11(c) of the Occupational Safety and Health Act (OSH
Protection Under Act) prohibits retaliation by employers against workers who “blow
the OSH Act the whistle” by exposing health and safety hazards. Workers who
believe they were unfairly treated because they complained
about unsafe or unhealthy working conditions can file a complaint
with OSHA. If, upon investigation, OSHA finds the allegation
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Semiannual Report to the Congress October 1, 1996 - March 31, 1997
The OIG audit found that workers who complained directly to their
employers about workplace safety or health hazards were more
likely to be fired from their jobs than workers who directly
complained to OSHA. Based on the random sample of 653
discrimination cases we reviewed, nearly 82 percent of the
workers who had asked their employers to correct safety/health
hazards stated that they were subsequently fired in retaliation for
complaining. Approximately 51 percent of employees who
complained directly to OSHA stated that they were improperly
terminated from their jobs. Although the incidence of terminations
is high in both cases, OSHA’s involvement seems to have had a
dampening effect on employers’ willingness to fire employees
who complain about unsafe or unhealthy work places.
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Semiannual Report to the Congress October 1, 1996 - March 31, 1997
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Semiannual Report to the Congress October 1, 1996 - March 31, 1997
Over the years, the OIG has conducted numerous audits and
investigations of various aspects of the job training programs
administered by the Department and has made numerous
recommendations on ways to improve program accountability
and performance. Improving performance of its employment and
training programs is an important issue facing the Department of
Labor. This issue has taken on even greater importance with the
implementation of the welfare reform legislation that was enacted
in the last Congress. It is expected that the Department’s job
training programs will be a major component of the strategy to
train and place welfare recipients into jobs and off of the welfare
rolls. As part of our efforts to effect improvements in these
programs and in support of the Department’s efforts to protect the
wages and employment prospects of the American workers, we
continue to devote significant resources to this important area.
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Semiannual Report to the Congress October 1, 1996 - March 31, 1997
Audit Results
Participants Had an The program has addressed the employment element of the
Edge in Obtaining above measurement. The OIG found that participants of the
and Retaining retraining program had an edge in obtaining and retaining
Employment employment. Participants were better able to obtain and retain
employment than those who did not receive retraining services.
On average, the participant employment rate was 9 percentage
points higher over the measurement period. The comparative
success of the participants obtaining employment suggests the
program had a positive impact.
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Semiannual Report to the Congress October 1, 1996 - March 31, 1997
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Semiannual Report to the Congress October 1, 1996 - March 31, 1997
Estimated earnings for the two groups were virtually the same
over the measurement period as the participant edge in
employment offset the nonparticipant wage advantage. In
contrast, nonparticipant audit results bear out these expecta-
tions.
Conclusion
Recommendation
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Semiannual Report to the Congress October 1, 1996 - March 31, 1997
Grantee Was Unable to The OIG found that New Horizons, Inc., was unable to deliver
Deliver Services the services promised. They only provided technical training to
Promised 25 percent of the participants (37 of the 150 required by the
grant). Moreover, training-related employment was obtained
by only 15 percent of the 105 participants required under the
grant. The audit determined that:
The audit also found that the cost for each valid training-related
placement for the eligible participants exceeded the estimated
costs in the grant proposal, and the participants earned on
average, one dollar less per hour than the wage called for in the
proposal.
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Semiannual Report to the Congress October 1, 1996 - March 31, 1997
Audit of Grant to Hughes Aircraft Company (Hughes) received two DCAP grants
Hughes Aircraft totaling $16 million to provide basic readjustment and retraining
Company services to approximately 5,000 dislocated workers. This was
the first time a DCAP grant was awarded directly to an employer.
Hughes subcontracted with DefCon II, a training provider, to
perform day-to-day project operations.
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Semiannual Report to the Congress October 1, 1996 - March 31, 1997
FEDERALLY-ADMINISTERED
PROGRAMS
JTPA Title IV authorizes employment and training programs for
the Job Corps, Veterans’ Employment, Native Americans,
Seasonal Farmworkers, and other activities and programs
collectively known as “National Programs.”
Job Corps
The Job Corps is authorized under Title IV-B of the JTPA and is
funded at almost $1 billion per year. The Job Corps is a
residential education and training program to assist disadvan-
taged youth to become more employable and productive citizens.
Since 1964, Job Corps has served over 1.77 million young men
and women. There are currently 111 Job Corps Centers
located throughout the country. During this semiannual
reporting period, we performed four audits of Job Corps
contractors.
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Semiannual Report to the Congress October 1, 1996 - March 31, 1997
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Semiannual Report to the Congress October 1, 1996 - March 31, 1997
Owners Benefit making contributions to its “profit sharing plan” and the vesting
Disproportionately provisions for this plan, which disproportionately benefitted
From Contract Fringe CAI’s owners and not its employees in general. The total
Benefits
questioned for these activities was $153,153. CAI disagreed
with most of the OIG findings. (Report No.18-97-002-07-735; issued
November 1, 1996)
Supplemental Audit
Identifies Excessive and The OIG performed a follow on audit of the direct costs: (1) for
Inappropriate Costs to the national contract from March 1996 through the contract ex-
Government Contract
piration of June 9, 1996; and (2) for the regional contract from
March 1996 through May 1996. The OIG also audited the indirect
costs charged by CAI for Fiscal Year 1996 (June 1995 through
May 1996) and performed supplemental audit work on the prior
contract periods. As a result, the OIG questioned direct costs of
$14,201 and indirect costs of $112,478 for the current audit
period, and $21,469 (both direct and indirect) based upon the
supplemental audit work.
The OIG also concluded that CAI did not meet the basic
performance objectives of its regional Job Corps contract. In
addition to the financial aspects of CAI’s contract activities, we
also questioned CAI’s program performance under the DOL
Region VI contract. For example, in the first year of the
contract, CAI did not recruit the CAI/DOL agreed upon number
of females (500) for Job Corps Centers, nor did CAI place the
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Semiannual Report to the Congress October 1, 1996 - March 31, 1997
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Grantee Pays
Questioned Costs The OIG questioned $69,244 because cash drawdowns
to DOL exceeded grant expenditures ($53,753 plus $5,668 of imputed
interest), the grant was overcharged for indirect costs
($7,356), and because of unsupported direct charges ($2,517).
In February, the Grant Officer disallowed all questioned costs;
in March, DC-DOES made a cash payment to the Department
for the disallowed costs. (Report No. 18-97-010-01-010; issued
January 24, 1997)
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Semiannual Report to the Congress October 1, 1996 - March 31, 1997
ETA agreed with OIG that linking UI wage records and other
electronic data may provide outcome information over a longer
time period and at a reduced cost. As a result of the audit, the
Office of Job Corps has begun efforts to obtain UI wage data
for the purpose of following up with Job Corps students to
determine long-term employment status. To date, efforts to
obtain UI wage data in selected states are under way. An initial
pilot, testing the quality and consistency of the data, will
determine the extent to which the UI wage records data source
is a viable option for Job Corps to pursue nationwide. With
respect to recommendations 1, 3, and 4, ETA expressed their
support in granting waiver authority when requested. Although
ETA indicated they would welcome the opportunity to work with
the states to achieve the objectives, the OIG recommends that
ETA take the initiative. (Report No. 03-97-024-03-001; issued March
31, 1997)
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Semiannual Report to the Congress October 1, 1996 - March 31, 1997
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Semiannual Report to the Congress October 1, 1996 - March 31, 1997
OIG Takes Part in For example, a joint case involving several Federal and State
Multi-Agency Fraud agencies, including the OIG, uncovered a scheme to defraud
Investigation the Departments of Housing and Urban Development, Health
and Human Services, and Labor.
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Semiannual Report to the Congress October 1, 1996 - March 31, 1997
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Semiannual Report to the Congress October 1, 1996 - March 31, 1997
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Semiannual Report to the Congress October 1, 1996 - March 31, 1997
OIG Has Been Our Labor Racketeering Program has been very effective over
Instrumental in Removing the past 20 years and has been instrumental in removing
Organized Crime from associates of organized crime syndicates from some of the
Unions Nation’s largest labor unions. Our work has been most recently
used to establish patterns of racketeering in several civil filings
by DOJ against corrupt unions and their officers under the
Racketeer Influenced and Corrupt Organizations Act (RICO). The
OIG has also worked closely with court-appointed monitors in
these cases to remove corrupt officials from unions and help
restore democratic representation for their membership.
Emergence of While the civil RICO process has made an impact on traditional
Non-Traditional organized crime groups, our investigations are showing that the
Organized Crime labor racketeering arena is changing. Over the past few years,
we have seen a significant increase in labor racketeering
activities by non-traditional organized crime groups (e.g.,
Russian, Asian, etc.) and by a new generation of “white-collar
racketeers” such as lawyers, accountants, and brokers, who
utilize complex financial schemes to defraud the public. In
particular, we have seen an increase in the activities of these non-
traditional criminal elements in the employee benefit plan arena.
Schemes Are More In addition, the nature of our Labor Racketeering investigations
Complex has changed drastically because the schemes are more
sophisticated and complex. As a result, these types of
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Semiannual Report to the Congress October 1, 1996 - March 31, 1997
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Semiannual Report to the Congress October 1, 1996 - March 31, 1997
HERE Local 54 -- The Labor Racketeering Division has worked closely with the
Atlantic City, HEREIU monitor to remove from office union officials having
New Jersey identified ties to organized crime. In December 1990, a Civil
RICO complaint was filed alleging a 20-year pattern of
racketeering by the Scarfo La Cosa Nostra (LCN) Family.
Included in the complaint were allegations that the LCN took
control of Local 54 (Atlantic City, New Jersey) by force and
maintained their control of the union by threatening to kill any
members who attempted to run against them in general
elections. There were no contested elections in 20 years, and
less than 5 percent of the 15,500 members voted.
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Semiannual Report to the Congress October 1, 1996 - March 31, 1997
This case is significant because it marks the final stage in the Civil
RICO process -- after removing organized criminal influence, the
Government returns the union back to its members free of
corruption. As a result of the court-appointed Monitorship in Local
54 an entire new group of officers -- with no organized crime
associations -- has been elected to run the union. These positive
results illustrate that the strategy of filing a Civil RICO complaint
and appointing a monitor of Local 54 has succeeded in its
primary objective: the removal of organized crime from the union
and the return of democratic leadership to the union. U.S. v. HERE
Local 54, et al. (D. New Jersey)
HERE Local 69 -- In another Civil RICO action involving a local of the HEREIU, the
Secaucus, court-appointed monitor banned the president, vice-president,
New Jersey secretary treasurer, and health and welfare fund administrator
of HERE Local 69 for life from holding any position of trust in
Local 69 and its health and welfare fund. The monitor found that
Local 69 President, John Agathos, Sr., and fund administrator,
John Agathos, Jr., were associated with the Genovese LCN
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Semiannual Report to the Congress October 1, 1996 - March 31, 1997
During this reporting period, four union officials were also banned
for life from ever earning wages and/or benefit fund credits in any
teamster-related capacity. The four officials included the
former Local 282 President, Aneillo “Neill” Madonna, and three
on-site stewards: Charles Lanza, Ronald Forino, and Glenn
Boggia. In addition, two shop stewards for the local, Charles
Moran, Jr. and Ignatius Mangiaracina, were removed from their
positions by the Local's corruption officer for corrupt activity in
violation of the consent decree. U.S. v. IBT Local 282, et al. (E.D.
New York)
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Semiannual Report to the Congress October 1, 1996 - March 31, 1997
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Semiannual Report to the Congress October 1, 1996 - March 31, 1997
Bogus Unions More recently, we have also identified and focused on the
problem of “bogus unions,” which are often a ruse for selling
fraudulent health plans. These “unions” generally do not provide
representation to members with respect to labor-management
issues. However, under ERISA, health plans associated with
unions are not subject to state regulation, and these bogus unions
often escape state scrutiny.
President of a Health An example of this type of activity involves an OIG case in which
Plan Indicted for the President and owner of a health plan known as Employee
Embezzling Over Health Plan Administrators, Inc. (EHPA), of Westbury, New York,
$750,000 in Benefits was indicted for allegedly embezzling more than $750,000 in
employee health benefit contributions. Clarke Lasky was the
designated administrator and collective bargaining representa-
tive on behalf of hundreds of employers that had entered into
“Associate Membership” collective bargaining agreements with
Local 119 of the Brotherhood of Industrial Workers union. EHPA
would represent these employers concerning health benefit
coverage issues with the Local 119 Health & Welfare Fund.
EHPA was also authorized to collect the monthly employee health
benefit contributions from these employers, and then forward
them to the Local 119 fund. Lasky was charged with failing to
forward more than $750,000 in benefit contributions to the Local
119 fund, and converting the money over to his personal use.
Lasky additionally was charged with committing mail fraud, and
if convicted on all counts, he could receive a sentence of 60 years
in prison and fines totaling $3 million. This investigation was
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Semiannual Report to the Congress October 1, 1996 - March 31, 1997
OIG Investigative Under the Inspector General Act of 1978, the OIG has
Responsibilities responsibility for conducting investigations into: (1) labor-related
criminal conduct involving unions and industries with demon-
strated ties to, or influences by, known organized criminal groups,
whether they be traditional organized crime groups or newer, non-
traditional groups; and (2) significant, prolonged, systematic and
related criminal conduct which may be categorized as labor
racketeering.
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Semiannual Report to the Congress October 1, 1996 - March 31, 1997
Company Owner For example, in an OIG case in New Jersey, Leonard Pelullo, the
Convicted for owner of the Compton Press Company, was convicted on all 54
Embezzling Over counts of an indictment that charged him with embezzlement,
$4 Million in Pension money laundering, and conspiracy. The jury in the case found that
Plans Pelullo had looted over $4 million from the company’s pension
and profit sharing plans over a 3-year period. The investigation
disclosed that Pelullo had bilked the money from the Compton
Press Employees’ Profit Sharing Retirement Plan and the
Compton Press Employees’ Thrift Plan through a series of
financial transactions through numerous companies to conceal
and disguise the source and ownership of the embezzled funds.
This case was conducted by the OIG, the Department’s Pension
and Welfare Benefits Administration, and the Federal Bureau of
Investigation. U.S. v. Pelullo (D. of New Jersey)
Employee Benefit One example of abuse we have identified involves an attorney for
Plan Attorney an employee benefit plan with over $30 million in assets. In this
Incarcerated case, the attorney engaged in a scheme to temporarily divert
pension assets to invest in an off-shore, lucrative (yet high-risk)
investment scheme. Some $10 million in pension assets were
lost in the scheme when the off-shore investors stole the
money. The attorney, who pled guilty to charges of conspiring
to solicit and receive kickbacks related to influencing the
investment of the $10 million of pension funds, is currently
incarcerated. U.S. v. Pollock (E.D. New York)
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Semiannual Report to the Congress October 1, 1996 - March 31, 1997
Investment Advisor In another service provider case during this reporting period, a
Sentenced to Prison pension fund investment advisor to the Roofers Local Union 12
for Embezzlement pension plan in Connecticut was sentenced to more than 7
and Theft of $2.5 years in prison for embezzlement and theft of $2.5 million from
Million of a Union's the union’s pension plan. August Mezetta, the pension fund
Pension Plan
investment advisor, was also ordered to make restitution of
$2.8 million to the pension plan, told to serve 300 hours of
community service, and given 3 years probation.
Construction Loan The OIG, in conjunction with its probe into labor racketeering in the
Activity construction industry, has also been looking into the use of
pension plan assets as loans for construction projects and other
related loan activity. These cases are very complex in terms of the
way the fraud is concealed.
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Semiannual Report to the Congress October 1, 1996 - March 31, 1997
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Semiannual Report to the Congress October 1, 1996 - March 31, 1997
WORKPLACE BENEFITS
Audit of PWBA’s During this reporting period, the OIG conducted an audit of the
Employee PWBA’s Employee Contributions Project (ECP). Our objective
Contributions Project was to determine if PWBA is effectively addressing the issue of
delayed/diverted remittances of employee contributions to
benefit plans.
The OIG found that PWBA’s efforts in this project had a positive
impact in protecting plan assets, particularly with respect to
increasing enforcement in this area as well as participant
awareness of the problem. However, we also found that
improvements were needed in the targeting of this enforcement
initiative as well as in the accuracy and completeness of their
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Semiannual Report to the Congress October 1, 1996 - March 31, 1997
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Semiannual Report to the Congress October 1, 1996 - March 31, 1997
HEALTH CARE The OIG has contributed significantly towards identifying and
FRAUD eradicating fraud in the DOL disability programs. Since 1990,
the OIG has devoted approximately 32 percent of its Program
Fraud Division resources to investigate the $1.84 billion FECA
Program as well as other health care-related fraud. Successful
completion of health care-related investigations over this same
period resulted in 304 indictments, 277 convictions and
monetary accomplishments exceeding $30 million.
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Semiannual Report to the Congress October 1, 1996 - March 31, 1997
CLAIMANT FRAUD During this reporting period, the OIG opened 88 FECA and
other health care-related investigations. Also, FECA and health
care-related investigations resulted in 21 indictments, 17
convictions and $3.8 million in monetary results. The OIG
devotes substantial effort to investigate allegations that
individual claimants are defrauding the FECA program.
Former Army For example, OWCP recently terminated the FECA benefits of
Employee Pleads Jerry W. Mitchell, Sr., after he pled guilty to fraudulently
Guilty to Fraudulently obtaining FECA benefits. Mitchell, a former civilian employee
Obtaining FECA with the Department of the Army at Fort Polk, Louisiana, had
Benefits been receiving over $2,200 in wage compensation benefits
every 28 days based on his claims to be totally disabled after a
work-related injury in 1983. An OIG investigation disclosed that
Mitchell was involved in several work activities, including real
estate sales, raising and selling cattle, and serving as an
overseer of a hunting lodge. Mitchell was sentenced to 12
months in prison, 3 years supervised probation after release,
and ordered to make restitution of over $55,129. At
sentencing, the judge told Mitchell “the Court is tired of the
rampant fraud in this program occurring at Fort Polk and the
Court finds this type of conduct reprehensible.” Had this
individual not been removed, it is projected that he would have
received compensation benefits totaling $108,362 over a 10-
year period, or $492,936 based on life expectancy tables. U.S.
v. Mitchell (W.D. Louisiana)
54
Semiannual Report to the Congress October 1, 1996 - March 31, 1997
MEDICAL PROVIDER Fraud within the health care community is estimated to cost the
FRAUD American taxpayers millions of dollars annually. In an attempt to
help thwart this fraudulent activity, the OIG began a nationwide
investigative initiative designed to identify, prosecute, and
remove from these programs, those medical and health care
providers who have been convicted of fraud. Currently, the OIG is
conducting several investigations in this area. Over the years, our
investigations have uncovered schemes where doctors, clinics,
pharmacists, physical therapists, medical technicians, and
providers of medical equipment have billed the Government for
services that were not rendered, filed multiple bills for the same
procedure, billed for non-existent illnesses or injuries, or
overcharged for services.
Chiropractor For example, during this reporting period, criminal and civil
Assessed over monetary fines, assessments, restitutions and penalties totaling
$102,160 in Fines, more than $102,160 were assessed against Paul L. Schutz, a
Penalties and Washington State chiropractor, as a result of a joint OIG
Restitution
investigation conducted with the Department of Health and
Human Services, the Washington State Department of Labor,
the Secret Service, and the FBI. The investigation determined
that Schutz had submitted almost $58,500 in false claims to
OWCP, Medicare, private insurance companies, and the State,
by billing for missed or canceled appointments as office visits
with treatments, and for examinations which were never
provided. In addition to the monetary penalties, Schutz was
placed on three years probation and he consented to being
excluded as a provider of medical services under FECA for a
period of five years. U.S. v. Schutz (E.D. Washington)
55
Semiannual Report to the Congress October 1, 1996 - March 31, 1997
INDEBTEDNESS The Black Lung Benefits Program is one of the three work-related
disability compensation programs administered by ESA’s Office
OF THE BLACK of Workers’ Compensation Programs. This program provides
LUNG disability benefits and medical services to eligible workers in the
DISABILITY coal mining industry when a responsible coal mine operator
TRUST FUND cannot be determined liable for these benefits.
The Trust Fund is in The OIG audited the Department's financial statements for Fiscal
$5 Billion Debt Year 1996, in accordance with our statutory requirements under
the Chief Financial Officers Act. A summary of this
comprehensive audit is found in the Departmental Management
section of this report. The Department’s financial statements
reflect that the Black Lung Disability Trust Fund (BLDTF) is in debt
for over $5 billion to the U.S. Treasury. This raises concerns
about its continued solvency. The debt results from advances
provided to the program. These advances, which have become
an annual necessity for the fund, were originally obtained to
fund benefit payments that could not be met by coal excise tax
collections (the principal source of revenue to the fund).
Currently, the excise taxes are sufficient to pay benefits and
administrative costs; however, the fund must continue to
borrow from the Treasury to pay the interest due on past
advances. Of the current $5 billion of cumulative advances,
56
Semiannual Report to the Congress October 1, 1996 - March 31, 1997
FRAUD IN THE The OIG remains concerned about fraud activity related to this
UNEMPLOYMENT program. As with any multi-billion dollar Federal benefit
INSURANCE
PROGRAM program, there are those, both claimants and individuals
responsible for administering the program, who try to defraud
it. OIG in-vestigations continue to identify fraudulent claims for
benefits by individual claimants and incidents of embezzlement
by employees who administer the program (particularly at the
state level). The OIG is particularly concerned with an
57
Semiannual Report to the Congress October 1, 1996 - March 31, 1997
Six Plead Guilty For For example, during this reporting period, six Detroit individuals
Participating in UI pled guilty to mail fraud charges for their participation in a scheme
Fraud Scheme to defraud the Michigan Employment Security Commission
(MESC) out of UI benefits in a fictitious employer scheme. A joint
OIG and MESC investigation found, that from 1985 to 1991,
Bruce and Jerzine Carter owned and operated a company known
as Landy’s Janitorial Services, Inc., and in 1991, the company lost
its only contract and ceased doing business. The investigation
revealed that from 1991 to 1993, the Carters conspired with other
individuals to file false unemployment benefit claims with the
MESC. The individuals claimed that they had been employed by
Landy’s Janitorial Services, and that they had been subsequently
laid off. As a result of this ruse, the MESC mailed benefit checks
to the applicants. These individuals cashed the UI benefit checks,
and shared a portion of the proceeds with the Carters. MESC
calculated that it had been defrauded out of over $443,000 in UI
benefits to over 45 different individuals. U.S. v. Carter, et al (E.D.
Michigan)
Three Individuals In another Michigan case, Brian Johnson, Timothy Johnson, and
Charged in UI Charles Dixon were charged for their involvement in a scheme to
Fictitious Employer defraud the Michigan State UI program. An OIG investigation
Fraud Scheme revealed that for three years, the defendants filed fraudulent UI
claims against four fictitious companies created by Brian
Johnson and Charles Dixon. The scheme involved the services
of a business agent/bookkeeper who would incorporate the
fictitious business for a fee. He would then educate Johnson
and Dixon about the filing specifics and establishing tax
liabilities. The defendants would recruit individuals to file claims
to the State requesting UI payments due to being laid off from
the fictitious companies. The defendants and the claimants
would then split the proceeds. The State of Michigan estimated
that it was defrauded of over $168,000 in UI benefits as a result
of this scheme. U.S. v. Johnson, et al (E.D. Michigan)
58
Semiannual Report to the Congress October 1, 1996 - March 31, 1997
New York Man In New York, a 14-count indictment was returned against Mark
Indicted for His J. Esposito charging him with mail fraud and money laundering
Involvement in UI violations in connection with a scheme where he fraudulently
Fraud Scheme obtained over $110,000 in UI benefits from September 1991 to
July 1995. A joint investigation with the New York State
Department of Labor’s OIG, determined that Esposito had used
the U.S. Mail to file at least 34 different fraudulent UI claims using
various aliases and addresses and supporting his claims with
bogus W-2 Forms and false Social Security Numbers. Two
counts charged him with violating Federal money laundering
statutes by depositing funds from an unlawful activity in order to
conceal and disguise the source of those illegally-obtained funds.
In addition, at the time of his indictment, Esposito was already
serving a 30-month sentence at a federal correction facility in
Pennsylvania for a mail fraud conviction involving a car lease
scheme. U.S. v. Esposito (E.D. New York)
59
Semiannual Report to the Congress October 1, 1996 - March 31, 1997
DEPARTMENTAL MANAGEMENT
AND INTEGRITY
FINANCIAL The Chief Financial Officers Act of 1990 (CFO Act) requires
MANAGEMENT agencies to report annually to Congress on their financial status
and any other information needed to fairly present the agencies’
financial position and results of operations. To meet the CFO Act
reporting requirements, the Department prepares annual
financial statements, which we audit.
FY 1996 Consolidated The Department’s financial statements for FY 1996 reflect $36.6
Financial Statements billion in expenses, of which approximately 82 percent are “pass
through” funds, or funds actually expended by state or local
governments. Of the total, $22.7 billion was expended by the
states for unemployment insurance benefit payments, and
another $7.4 billion by state and local governments that operate
state unemployment insurance, employment service, and JTPA
programs. The balance of the expenses were for benefit
payments and services provided directly by the Department.
60
Semiannual Report to the Congress October 1, 1996 - March 31, 1997
Implementation of the In our FY 1994 audit, we reported that the Department had not
CFO Act fully implemented the functions of a Chief Financial Officer in
accordance with the CFO Act. The Department has worked
with the OIG and OMB to develop an organizational structure
and related departmental policies that provide the CFO with the
appropriate authority to carry out the duties embodied in the
CFO Act. The Department is in the process of finalizing this
structure and policies; however, they were not final when the
FY 1996 audit report was issued.
ADP Systems Access We noted that controls over user access and segregation of
duties need to be developed. We found that ETA did not restrict
access to certain Grant Contract Management Information
System (GCMIS) modules or functions based on user profiles.
The GCMIS system is used by ETA to process over $7 billion in
61
Semiannual Report to the Congress October 1, 1996 - March 31, 1997
Wage and Hour’s Civil In our FY 1993 audit, we made several recommendations
Monetary Penalty and pertaining to Wage and Hour’s Civil Monetary Penalty (CMP) and
Back Wage Systems back wage activities. The problems that resulted in these
recommendations continue to exist. The recommendations
address the need for improvements in the accounting and
collection of CMPs and back wage agreed-to-pay amounts, as
well as the need to distribute back wage collections to the
affected employees or reverting the funds to Treasury.
Allowance for In our FY 1995 audit, we recommended that the Chief Financial
Uncollectible Accounts Officer ensure that procedures were established for reassessing
reserves for uncollectible accounts in accordance with Federal
accounting standards. Although guidance was issued by the
CFO in FY 1996, we found that adequate procedures were not
followed regarding Unemployment Trust Fund receivables. This
resulted in a $366 million understatement of the reserve for
uncollectible accounts. The financial statements were adjusted
to reflect this.
62
Semiannual Report to the Congress October 1, 1996 - March 31, 1997
Miscellaneous The accounting systems used by the Mine Safety and Health
Revenues Administration (MSHA), Occupational Safety and Health
Administration (OSHA), and the Pension and Welfare Benefits
Administration (PWBA) to track proposed assessments and civil
penalties were not integrated with DOLAR$, the Department’s
central accounting system, to provide agency-wide financial
information in an efficient and effective manner. Additionally,
some systems did not provide transaction-level detail to
support billings, collections, write-offs, accrued interest and
administrative fees.
Black Lung Disability Several assumptions used by the Black Lung actuarial model
Trust Fund Actuarial have not been updated recently or should be reviewed to
Liability determine if changes are necessary. Although ESA agreed to
review and revise elements of the model, our actuarial review
indicates that no changes have been made to the model for FY
1996.
63
Semiannual Report to the Congress October 1, 1996 - March 31, 1997
Black Lung Disability The rate of interest charged on advances to the Trust Fund is not
Trust Fund (BLDTF) in compliance with the Black Lung Benefits Revenue Act of 1977,
as amended. ESA has initiated discussions with the U.S.
Treasury to revise their existing Memorandum of Understanding
(MOU) to include specific provisions which would preclude
Treasury from revising interest rates retroactively on advances,
even if such rates were improperly established. ESA’s position is
that Treasury has no legal authority to change an interest rate once
it has been established. The OIG believes ESA’s position
conflicts with Treasury’s authority and responsibility provided in
the Act.
64
Semiannual Report to the Congress October 1, 1996 - March 31, 1997
Job Corps Program Although Job Corps has made progress in addressing the
Accounting weaknesses identified in 1995, corrective action on the Job
Corps’ Student Pay, Allotment and Management Information
System is not complete.
65
Semiannual Report to the Congress October 1, 1996 - March 31, 1997
MSHA Inspector One function of the Department of Labor that most directly
Pleads Guilty to impacts the public is in the mining industry where the
Bribery Department’s Mine Safety and Health Administration (MSHA) is
responsible for inspecting and safeguarding the Nation’s mines.
When an MSHA Mine Inspector is compromised through bribery,
his actions may place the safety of hundreds of miners in
jeopardy. During this reporting period, Ted Phillips, an MSHA
66
Semiannual Report to the Congress October 1, 1996 - March 31, 1997
67
Semiannual Report to the Congress October 1, 1996 - March 31, 1997
Review of MSHA Our review of MSHA’s proposed training contract with the United
Training Contract Mine Workers of America (UMWA) and the Bituminous Coal
Operators Association (BCOA) brought issues and information
to the attention of MSHA which ultimately caused the contract not
to be authorized.
MSHA Cancels Plan However, our review identified serious concerns regarding the
to Execute Contract propriety of the proposed contract as well as several
questionable policy issues. In particular, a clause in the collective
bargaining agreements between the union and the coal
operators established an obligation between the parties to fund
the training program and some of the parties acknowledged their
responsibility and readiness to finance the program during
interviews. In addition to the issues raised about a valid need
for MSHA’s financial assistance for the training program, we
noted concerns about the relevance of several training modules
68
Semiannual Report to the Congress October 1, 1996 - March 31, 1997
69
Semiannual Report to the Congress October 1, 1996 - March 31, 1997
70
Semiannual Report to the Congress October 1, 1996 - March 31, 1997
AUDIT RESOLUTION
71
Semiannual Report to the Congress October 1, 1996 - March 31, 1997
ETA Disallows The OIG audited two Defense Conversion Adjustment Program
$600,000 in Defense grants DOL awarded to the Hughes Aircraft Company (Hughes)
Conversion to provide basic readjustment and retraining services to workers
Adjustment Program dislocated because of reduced military spending and the closing
Funds
of military facilities. During this reporting period, ETA disallowed
$603,240 of the $1.9 million questioned by the OIG.
DOL and Former Job On January 10, 1997, DOL and the Leo A. Daly Co. (Daly) entered
Corps Contractor into a Settlement Agreement in which DOL accepted Daly’s offer
Reach $300,000 of $300,000 in full satisfaction of the $833,270 that was previously
Settlement disallowed. The agreement is the resolution to a series of OIG
audits on Daly’s claims for reimbursement of indirect costs
related to engineering and architectural services Daly provided at
various Job Corps Centers. (Report Nos. 18-92-027-03-370; 18-94-009-
03-370; 18-94-010-03-370; 18-94-011-03-370)
U.S. Attorney Files The OIG had audited two contracts of the Technical Assistance
Complaint Against Group, Inc. (TAG), which provided real estate management
Former Job Corps services to the Job Corps. The OIG concluded TAG’s president
Contractor (and sole shareholder) had caused TAG to bill the Department
for: excessive and unauthorized salary payments for himself and
family members, excessive fringe benefits, personal vacation
costs, college tuition costs for his son, a variety of personal and
family expenses, and other unallowable costs. The Department
72
Semiannual Report to the Congress October 1, 1996 - March 31, 1997
ETA Disallows For the period July 1993 to March 1995, the OIG audited
$124,610 of Grant $663,422 of grant funds expended by the Native American Indian
Funds Association (NAIA) and questioned $126,037. The OIG has also
questioned the location of an NAIA field office, because the area
served contained a low percentage of Native Americans. The
Grant Officer has disallowed $124,610, the majority of which
resulted from misclassification of claimed costs and unsupported
costs. In response to the grantee’s decision to move the affected
field office, the Grant Officer has determined this finding will
remain open until ETA has had sufficient opportunity to determine
the effectiveness of the new location in serving Native Americans.
(Report No. 18-96-008-03-355; issued March 20, 1996)
Following a lengthy legal battle, on April 17, 1995, the Fifth Circuit
Court of Appeals vacated a previous District Court decision
favoring the subcontractors, stating that both the State and DOL
were free to pursue final agency action regarding whether the
subcontractors’ costs and revenues were reasonable and
necessary.
73
Semiannual Report to the Congress October 1, 1996 - March 31, 1997
74
Semiannual Report to the Congress October 1, 1996 - March 31, 1997
APPENDIX
75775
Semiannual Report to the Congress October 1, 1996 - March 31, 1997
REPORTING REQUIREMENTS
Requirement Under the Inspector General Act of 1978
Section 5(a)(10) - Summary of Each Audit Report Over 6 Months Old for
Which No Management Decision Has Been Made ................................................................. 80
Note: This table cross-references the reporting requirements prescribed by the Inspector General Act of 1978, as amended,
and Senate Report No. 96-829 (Supplemental 1980 Appropriations and Rescissions Bill) to the specific pages where they are
addressed. The amount of "deliquent debts" owed to the Department can be found in the annual Consolidated Financial
Statement Audit.
76
Semiannual Report to the Congress October 1, 1996 - March 31, 1997
This schedule shows the extent to which DOL management has taken steps, during the 6-month reporting
period, to resolve the costs questioned as having been improperly expended. Audit resolution occurs
when management either agrees with the auditor’s finding and disallows those costs that were ques-
tioned, or management decides that the expenditure should be allowed. (This schedule is required by
Section 5(a)(8) of the Inspector General Act, as amended.)
This schedule presents the activity for costs that have been disallowed during the 6-month period. This
schedule is included in the OIG Semiannual Report to demonstrate the flow of information to the Secretary’s
Semiannual Management Report, which is issued by the Secretary as required by Section 5(b)(2) of the
Inspector General Act, as amended.
Recommendations that Funds be Put to Better Use (Agreed & Implemented) ........................... 79
These schedules depict the activity during the 6-month reporting period for those funds that were recom-
mended by the auditor to be put to better use. These schedules are included in the OIG Semiannual
Report to demonstrate the flow of information to the Secretary’s Semiannual Management Report, which
is issued by the Secretary as required by Section 5(b)(3) of the Inspector General Act, as amended.
This schedule presents a summary of all audit reports that continue to remain unresolved for more than 6
months. For these reports, a management decision is still outstanding. (This schedule is required by
Section 5(a)(10) of the Inspector General Act, as amended.)
This schedule is a listing, subdivided according to subject matter, of all audit reports that were issued by
the OIG during the 6-month reporting period, as required by Section 5(a)(6) of the Inspector General Act,
as amended. This listing also provides for each audit report, where applicable, the total dollar value of
questioned costs and the total dollar value of recommendations that funds be put to better use.
This schedule is a listing of audit reports that were issued during the 6-month reporting period as required
by the Single Audit Act of 1984, whereby Federal awards administered by non-federal entities are audited.
This listing also provides for each audit report, where applicable, the total dollar value of questioned costs
and the total dollar value of recommendations that funds be put to better use.
Note: The schedule that lists the significant audit recommendations which have not been resolved for over 1 year and on which corrective
action has not been completed is reported in the Secretary's Semiannual Management Report.
77
Semiannual Report to the Congress October 1, 1996 - March 31, 1997
QUESTIONED COSTS*
Number of Total
Audit Questioned Costs
Reports1 ($ million)
DISALLOWED COSTS
Number of Total
Audit Disallowed Costs
Reports1 ($ million)
78
Semiannual Report to the Congress October 1, 1996 - March 31, 1997
79
Semiannual Report to the Congress October 1, 1996 - March 31, 1997
Awaiting Resolution:
80
Semiannual Report to the Congress October 1, 1996 - March 31, 1997
81
Semiannual Report to the Congress October 1, 1996 - March 31, 1997
1
Recommendations were referred to the Deputy Secretary for resolution.
2
Unresolved pending a response to the final audit report.
3
The States have 180 days to issue a Final Management Decision. Program Agencies and OIG have an additional 180 days to accept
the State-level decision.
4
Pending completion of indirect cost negotiations and closure.
5
ETA Initial Management Decision issued, awaiting Final Management Decision.
6
Recommendations were reviewed under the current FY 95 audit and remain unresolved.
7
Awaiting outcome of proposed congressional action to repeal Airline Rehire Program.
8
OIG and OASAM are working to resolve these recommendations.
9
Pending completion of DOL study.
10
Under review by the Office of Cost Determination or with Contracting Officer.
11
Recommendations are being resolved in conjunction with FY 1996 DOL Consolidated Audit.
12
Unresolved during the period.
13
Administrative findings remain unresolved.
14
A revised final determination was received on August 2, 1996. We asked the Grant Officer to make additional changes.
82
FINAL AUDIT REPORTS ISSUED BY THE OIG
October 1, 1996 - March 31, 1997
INCOME SECURITY
EQUITY IN SESA REAL PROPERTY - STATE OF LOUISIANA SESA 06-97-002-03-325 0 0 0
EQUITY IN SESA REAL PROPERTY - STATE OF DELAWARE SESA 06-97-003-03-325 0 0 0
EQUITY IN SESA REAL PROPERTY - CONNECTICUT SESA 06-97-005-03-325 0 0 0
EQUITY IN SESA REAL PROPERTY - DISTRICT OF COLUMBIA SESA 06-97-006-03-325 0 0 0
EQUITY IN SESA REAL PROPERTY - WYOMING SESA 06-97-007-03-325 0 0 0
EQUITY IN SESA REAL PROPERTY - MAINE SESA 06-97-008-03-325 0 0 0
EQUITY IN SESA REAL PROPERTY - TEXAS SESA 06-97-009-03-325 0 94,234 0
EQUITY IN SESA REAL PROPERTY - COLORADO SESA 06-97-010-03-325 0 79,346 0
EQUITY IN SESA REAL PROPERTY - VERMONT SESA 06-97-012-03-325 0 0 0
EQUITY IN SESA REAL PROPERTY - MASSACHUSETTS SESA 06-97-013-03-325 0 0
EQUITY IN SESA REAL PROPERTY - WEST VIRGINIA SESA 06-97-014-03-325 0 0 0
EQUITY IN SESA REAL PROPERTY - ILLINOIS SESA 06-97-015-03-325 0 0
EQUITY IN SESA REAL PROPERTY - MISSISSIPPI SESA 06-97-017-03-325 0 0 0
EQUITY IN SESA REAL PROPERTY - PENNSYLVANIA SESA 06-97-018-03-325 0 0 0
EQUITY IN SESA REAL PROPERTY - VIRGINIA SESA 06-97-019-03-325 2 940,465 0
EQUITY IN SESA REAL PROPERTY - TENNESSEE SESA 06-97-025-03-325 3 281,260 0
EQUITY IN SESA REAL PROPERTY - SOUTH DAKOTA SESA 06-97-028-03-325 0 0 0
JOB TRAINING
COMPARATIVE ANALYSIS OF JTPA TITLE III RETRAINING OUTCOMES JTPA 02-96-258-03-340 2 0 0
NEW HORIZONS, INC. PERFORMANCE AUDIT JTPA 06-97-001-03-340 0 0 155,000
HUGHES AIRCRAFT COMPANY JTPA 09-97-001-03-340 3 0 0
AMERICAN ELECTRONICS ASSOCIATION JTPA 09-97-003-03-340 0 29,530 0
MATHEMATICA POLICY RESEARCH, INC. JTPA 18-97-004-03-340 0 0 0
ACADEMY FOR EDUCATIONAL DEVELOPMENT JTPA 18-97-007-03-340 0 180,162 0
HOMELESS GRANTS AT THE SE TENN PIC JTPA 04-97-014-03-001 6 509,662 0
HOMELESS GRANTS KNOXVILLE-KNOX COUNTY JTPA 04-97-015-03-001 4 47,055 0
ROSEBUD SIOUX TRIBE DINAP 18-97-003-03-355 0 0 0
AMERICAN INDIAN OPPORTUNITIES INDUSTRIALIZATION CENTER DINAP 18-97-009-03-355 1 32,739 0
FRESNO PRIVATE INDUSTRY COUNCIL YFC 18-97-001-03-356 6 67,739 0
LOS ANGELES COMMUNITY DEVELOPMENT DEPARTMENT YFC 18-97-013-03-356 3 629,726 0
NAT’L PLASTERING INDUSTRY’S JOINT APPRENTICESHIP TRUST FUND OJC 18-97-014-03-370 5 859,115 137,127
MISSISSIPPI DEPT. OF EDUCATION - SCHOOL TO WORK STW 18-97-008-03-385 0 19,168 0
PIMA COUNTY HOMELESS GRANT OPR 18-97-011-03-380 0 0 0
CITY OF SAINT PAUL HOMELESS GRANT OPR 18-97-017-03-380 0 0 0
CALVILLO AND ASSOCIATES, INC. OJC 18-97-002-07-735 4 233,946 0
RES-CARE, INC OJC 18-97-012-07-735 1 215,116 0
CALVILLO AND ASSOCIATES, INC. OJC 18-97-015-07-735 0 126,679 0
D C. DEPARTMENT OF EMPLOYMENT SERVICES ASP 18-97-010-01-010 0 69,244 0
ELECTRONICALLY LINKED DATA SYSTEMS CAN REDUCE COSTS ADMIN 03-97-024-03-001 4 0 3,400,000
FINAL AUDIT REPORTS ISSUED BY THE OIG
October 1, 1996 - March 31, 1997
PENSIONS
PWBA’S EMPLOYEE CONTRIBUTIONS PROJECT ENFORC 09-97-002-12-121 4 0 0
DEPARTMENTAL MANAGEMENT
DEPARTMENT’S SAFETY AND HEALTH PROGRAM ADMIN 17-97-001-07-001 5 0 0
FY 95 WORKING CAPITAL FUND FINANCIAL STMTS. AND RELATED RPTS. ADMIN 12-96-015-13-001 0 0 0
FY 96 DOL CONSOLIDATED FINANCIAL STATEMENTS ADMIN 12-97-005-13-001 29 0 0
SINGLE AUDITS
CITY OF DETROIT, MICHIGAN CONTR 05-97-204-02-201 0 0 0
COOPERATIVE PERSONNEL SERVICES USES 09-97-511-03-320 0 0 0
HUMAN RESOURCES & OCCUP. DEVEL. COUNCIL JTPA 02-97-208-03-340 2 0 0
HUMAN RESOURCES & OCCUP. DEVEL. COUNCIL JTPA 02-97-209-03-340 2 0 0
RESEARCH FOUNDATION OF SUNY JTPA 02-97-212-03-340 0 0 0
PREP, INC. JTPA 05-97-106-03-340 0 0 0
FOCUS: HOPE JTPA 05-97-202-03-340 0 0 0
SERVICE JOBS FOR PROGRESS NATIONAL, INC. JTPA 06-97-114-03-340 0 0 0
MASHPEE WAMPANOAG INDIAN TRIBAL COUNCIL. INC. DINAP 02-97-202-03-355 6 0 0
SAINT REGIS MOHAWK TRIBE DINAP 02-97-205-03-355 0 0 0
TRIBAL GOVERNORS, INC. DINAP 02-97-206-03-355 0 0 0
TRIBAL GOVERNORS. INC. DINAP 02-97-207-03-355 0 0 0
MILWAUKEE AREA AMERICAN INDIAN MANPOWER COUNCIL DINAP 05-97-101-03-355 0 0 0
INDIANA AMERICAN INDIAN MANPOWER COUNCIL DINAP 05-97-103-03-355 0 0 0
MINNEAPOLIS AMERICAN INDIAN CENTER, INC. DINAP 05-97-105-03-355 0 0 0
LAC COURTE OREILLES BAND OF LAKE SUPERIOR INDIANS OF WI DINAP 05-97-203-03-355 0 0 0
BOIS FORTE RESERVATION TRIBAL COUNCIL DINAP 05-97-207-03-355 0 0 0
AMERICAN INDIAN CENTER OF ARKANSAS, INC. DINAP 06-97-101-03-355 0 0 0
INDIAN TRAINING AND EDUCATION CENTER, INC. DINAP 06-97-104-03-355 0 0 0
FOUR TRIBES CONSORTIUM OF OKLAHOMA DINAP 06-97-105-03-355 0 0 0
FOUR TRIBES CONSORTIUM OF OKLAHOMA DINAP 06-97-106-03-355 0 0 0
OKLAHOMA TRIBAL ASSISTANCE PROGRAM, INC. DINAP 06-97-107-03-355 0 0 0
NATIONAL INDIAN COUNCIL ON AGING INC. DINAP 06-97-108-03-355 2 0 0
UNITED URBAN INDIAN COUNCIL, INC DINAP 06-97-113-03-355 0 0 0
CROW TRIBE OF INDIANS DINAP 06-97-200-03-355 0 0 0
MUSCOGEE (CREEK) NATION DINAP 06-97-202-03-355 1 0 0
CHEYENNE RIVER SIOUX TRIBE DINAP 06-97-203-03-355 0 0 0
PONCA TRIBE OF OKLAHOMA DINAP 06-97-205-03-355 0 0 0
CONFEDERATED SALISH & KOOTENAI TRIBES DINAP 06-97-206-03-355 0 0 0
ASSINIBOINE & SIOUX TRIBES DINAP 06-97-207-03-355 0 0 0
MESCALERO APACHE TRIBE DINAP 06-97-208-03-355 2 0 0
CHEROKEE NATION DINAP 06-97-210-03-355 8 0 0
CHEROKEE NATION DINAP 06-97-211-03-355 0 25,000 0
RAMAH NAVAJO SCHOOL BOARD, INC. DINAP 06-97-213-03-355 0 0 0
DEVILS LAKE SIOUX TRIBE DINAP 06-97-214-03-355 0 0 0
SAINT STEPHENS INDIAN SCHOOL EDUCATIONAL ASSOCIATION DINAP 06-97-215-03-355 0 0 0
CHOCTAW NATION OF OKLAHOMA DINAP 06-97-216-03-355 0 0 0
PUEBLO OF ZUNI DINAP 06-97-217-03-355 1 0 0
CENTRAL TRIBES OF THE SHAWNEE AREA, INC. DINAP 06-97-218-03-355 0 0 0
ALABAMA-COUSHATTA INDIAN RESERVATION DINAP 06-97-219-03-355 0 0 0
PUEBLO OF ACOMA DINAP 06-97-220-03-355 0 0 0
CROW TRIBE OF INDIANS DINAP 06-97-221-03-355 0 0 0
YSLETA DEL SUR PUEBLO (TIGUA INDIAN RESERVATION) DINAP 06-97-222-03-355 0 0 0
STANDING ROCK SIOUX TRIBE DINAP 06-97-223-03-355 3 0 0
FINAL SINGLE AUDIT REPORTS
October 1, 1996 - March 31, 1997
No. of Non- Questioned Funds Put to
Name of Audit Program Report Number Monetary Rec. Costs Better Use
INVESTIGATIONS SCHEDULES
GAO 4
Total 172
Total 172
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Semiannual Report to the Congress October 1 - March 31, 1997
FINANCIAL ACCOMPLISHMENTS
Categories $Amount
Recoveries: 851,945
Restitutions: 11,125,316
Fines/Penalties 315,195
Total: 15,964,135
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Semiannual Report to the Congress October 1 - March 31, 1997
EMPLOYEE MISCONDUCT
CLARO, MARION JOYCE X X
PHILLIPS, TED E. X X
STOREY, LILLIAN X X
JONES, SENETRA N. X
CONFIDENTIAL/IA X 48,811
BACH, HAROLD T. X X
MARZESKI, WILLIAM X
BLACKWELL, ERNIE D. X
BLACK LUNG
OLIVER, LAVONNE X X 4,381
FECA
BROWN, DAVID X X
CLEMONS, TONY A. X
WINKLER, GARY X
MITCHELL, JERRY W. SR. X X X 55,229
DASHER, HERBERT X X X 275
PHILLIPS, DANNY L. X
BURT, OLLIE X
HOLMES, HARVEY DEAN X X
JONES, WANNELL X X
ATKINS, JOSEPH X 54,150
GARCIA, SHARON GAYLE X X X 3,078
SMOLINSKY, EDWARD J. X
OLSZEWSKI, ROBERT X 66,129
DIFUCCIA, RALPH X
SMART, WILLIAM H. X X
HICKS, ALBERT X 6,466
SIEGEL, HEATHER X
LAB, LOUIS X X
CARLSON, DONALD ROBERT X
BRAUD, JOSEPH P. MD X 25,500
GARCIA, PETE D.O. X 30,000
IOVINE, ANTOINETTE X X
MANNA, FELECIA X X
MODICA, GIUSEPPE X X
NWACHUKU, HELEN X
SCHUTZ, PAUL X X X 102,163
MEEHAN, PATRICK M. X 66,035
LSHWC
HINSON, SIDNEY X
STINSON, JOHNNY L. X X
OTHER
LAMANNA, SALVIN R. X X
TREVEAL, JEFFREY P. X
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Semiannual Report to the Congress October 1 - March 31, 1997
JOB CORPS
JTPA
HALL, DEBORAH X
CHERNICK, PAUL X
NAIMAN, ELIMELECH X
BRADFIELD, JOHNNY X X 6,019
ORGAN, STEVE X X X 10,050
GEORGIA NUT COMPANY X 65,000
EDMO, TAMMY X 4,924
ABDULLAH, GARY X
CHRISTENSEN, DAVID X
FERGUSON, MELVIN X
HILDEBRANDT, MIKE X
PAT GOINS BEAUTY COLLEGE
& ACADEMY X 40,294
SAMLETZKA, EDWARD X
IBARRA, SAMMY X X
HALL-BROWN, JOEY E. X 54,466
SPOTTED BEAR, AGNES MARIE X 8,538
HUGGANS, CHARLIE X
GRISWOLD, GERALD D. X 30,025
BRUMFIELD, STEPHONY X
GOLMAN, QUINTON X
HARRELL, SHIRLEY X
MOORE, DEREK X
SMITH, LAWRENCE X
WILSON, STACIE X
WILSON, TONIA X
WILSON, VALERIE X
UI
TILLMAN, THEODORE X
IRONS, STANLEY X
LUSTER, THOMAS X X X 5,468
SPEARMAN, MINNIE X 3,119
WEBB, KIM X X
EGELSTON, JIMMIE D. X
BOWSER, MARIE A. X 415,119
KELLEY, DANNY RAY X X 750
PEREIRA, JOSEPH X 82,910
NURSE, WANDAL. X
OUTEN, LEONARD E. X 7,775
ALLEYNE, BEVERLY D. X X X 7,046
CAROSI, MARK A. X X
JONES, CALVIN R. X 5,283
SKINNER, DONTE X
TRAPPIER, RONALD SR. X X X 3,245
HOPKINS, BRENDA X X X 2,929
91
Semiannual Report to the Congress October 1 - March 31, 1997
ENGLISH, WILLIE E. X
GREEN, EDWARD X X X 2,345
JONES, RONALD W. X X 4,213
ROGERS, JIMMY JOHN X X 3,636
SIMPSON, SHON STERLING X
O’CONNOR, CONNIE KAY X X X 5,118
ARABIE, GREGORY X X X 4,418
DEMBLY, HERSHEY LEE X 3,752
SLOAN, SHIRLEY X X 8,074
BARNES, GARY X X 10,270
GREGORY, DANIELC. X X 4,772
MARTIN, CLIFFORD RAY X X
MARTIN, KIMBERLY CAROLYN X X
PERRY, NANCY LEA X
ESPOSITO, MARK X
BOWDEN, DAREN L. X X
BOWDEN, SHANNON X X
CARTER, BRUCE E. X X
CARTER, JERZINE X
FRANKLIN, DELOIS L. X X
FRANKLIN, JOYCE X X
GREEN, CLAUDE E. X
GREEN, ROBERT W. X
HARRIS, ROSALYN X
HARRIS-PEGROSS, SHERMAN X
PEGROSS, SHERMANITA X
PERNELL, JEFFREY X X
ROBINSON, ANTHONY R. X
WILLIAMS, IRVING X
DIXON, CHARLES X
JOHNSON, BRIAN A. X
JOHNSON, TIMOTHY L X
TJTC
BROWN, DERRICK X
CURLES, DENA X
DERRICK BROWN &ASSOCIATES, INC. X
MOORE, LISA X
BENEFIT PLAN
92
Semiannual Report to the Congress October 1 - March 31, 1997
INTERNAL UNION
ANDERSON, DAWN X
ANDERSON, JAMES M X
ANDERSON, JAMES S X
ANDERSON, KEVIN X
ANDERSON, MARK X
ANGULO, MARIO X
CIBELLIS, EILEEN X
CONRAD, RONALD X X
DABRONZO, CHARLES J X 2,046
DIEFENTHALER, LOWELL X
DIXON, WALTER X X
GEORGOPOULOS, JOHN X
GILDER, DANNIE X 12,394
GOELZ, ROBERT X
GORDON, BERNARD F X X
HARTSEL, NORMAN X
HUMPHREYS, GEORGE X
KELLEY, JAN X
83
Semiannual Report to the Congress October 1 - March 31, 1997
KELLEY, VINCENT X
LALINDE, IVAN X
LAUREANO, CARMEN X
LOUIS PARISE, PRESIDENT X
LOUIS PARISE, JR., INVESTIGATOR X
LYON, JAMES D X
MILLER, BERNARD X 128,350
MONTAQUE, EDWARD X X 50,050
MONTENEGRO, ALFREDO X
PAONE, FRED
PAVCO, X
QUINONEZ, MARIA X
SANDOVAL, MEYER X
SCHOOP, RONALD X 50
SEIDMAN, HARRY X 30,650
WELLER, DONALD K. X
WINSTEAD, BRADY X
WYMER, MICHAEL X
LABOR-MANAGEMENT RELATIONS
ABRAMS, PAUL X X
BENNETT, FRED X
BROWN, RICHARD X
EDWARDS, DARLENE M X
GRAFF, STEFAN X
HERRERA, RENEE X
HERRERA, RICHARD X
SANTIAGO, ENRIQUE X X
SHEPPARD, BRYAN X
SHEPPARD, EARL X
SHEPPARD, FRANK X
TURPIN, ERIC X
WARDLAW, JAMES X
WEHBY, WILLIAM X X
OTHER
POLLACK, SANDFORD X X
POLLACK, SANFORD X
SIMMONS, CATHRYN M X
CIVIL RICO
AGATHOS, JOHN JR.
AGATHOS, JOHN SR.
SANTOLI, MICHAEL
94
Semiannual Report to the Congress October 1 - March 31, 1997
BLINKHORN, GERALD
DIMARCANTONIO, VINCENT 1,000
DUPONT, NORMAN
PIERCE, RANDY
VITOLO, DOMINICK
BOGGIA, GLENN
FORINO, RONALD
LANZA, CHARLES
MADONNA, ANIELO
Note: Names in bold print represent the cases featured in this report.
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Semiannual Report to the Congress October 1, 1996 - March 31, 1997
LIST OF ACRONYMS
Programs and Agencies Used in Appendix:
ADMIN Administrative Management
ALLDOL All Department of Labor Agencies
ASP Assistant Secretary for Policy
BLS Bureau of Labor Statistics
BLSG Bureau of Labor Statistics Grantees
CFO Chief Financial Officer
CMSH Coal Mine Safety and Health
CMWC Coal Miner Workers Compensation (Black Lung)
CONTR Contracts
DAPP Directorate of Administrative Procurement Programs
DINAP Division of Indian and Native American Programs
DIRM Directorate of Information Resource Management
DLHWC Division of Longshore and Harbor Workers Compensation
DOWP Division of Older Workers Programs
DSFP Division of Seasonal Farmworkers Programs
DSWCS Division of State Workers Compensation Standards
EN Enforcement Programs
ETA Employment and Training Administration
FECA Federal Employees' Compensation Act
FLC Foreign Labor Certification
JTPA Job Training Partnership Act
OASAM Office of the Assistant Secretary for Administration and Management
OCFO Office of the Chief Financial Officer
OFCCP Office of Federal Contract Compliance Programs
OFLS Office of Fair Labor Standards
OFM Office of Facilities Management
OFMS Office of Financial Management Services
OJC Office of Job Corps
OLMS Office of Labor-Management Standards
OPGM Office of Procurement and Grant Management
OPR Office of Policy Research
OSEC Office of the Secretary
OSHA Occupational Safety and Health Administration
OSHAG Occupational Safety and Health Administration Grantees
OSTP Office of Special Targeted Programs
OT AGY Other agency (No direct Department of Labor funds audited )
OWCP Office of Workers' Compensation Programs
PWBA Pension and Welfare Benefits Administration
SCSEP Senior Community Service Employment Program
SESA State Employment Security Agency
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Semiannual Report to the Congress October 1, 1996 - March 31, 1997
97